The National Company Law Appellate Tribunal (NCLAT) on Friday asked the resolution professional (RP) for Jaypee Infratech (JIL) to furnish an update of the resolution process of the bankrupt firm before July 20, when it will hear the first batch of petitions in which banks have challenged the rights over the mortgaged land with them by the corporate debtor. Hearing a bunch of petitions filed by several banks against the May 17 order of the Allahabad bench of National Company Law Tribunal (NCLT), the two-member bench of the appellate tribunal also said it would hear matters in which banks had challenged the alleged fraudulent and undervalued transactions committed by JIL and its parent Jaiprakash Associates on August 1.
The RP will share details of the resolution process, the NCLAT bench headed by Justice SJ Mukhopadhyay said, including the stage at which it is currently, and mention whether it is with the RP or with the CoC, or whether any particular plan has been accepted or rejected. The NCLT had ordered the land be transferred back to JIL as it had found the move to be “fraudulent, preferential and undervalued” on a petition filed by the RP alleging that the transfer of land from JIL to JAL amounted to asset stripping.
Contending that the land could have been sold or mortgaged by JIL to raise funds and complete the construction of flats, he said that the land, valued Rs 5,000-6,000 crore, was mortgaged to secure loans taken by JAL from State Bank of India, ICICI Bank, IDBI Bank and Standard Chartered Bank.
In its May 24 order, the NCLAT stayed the NCLT’s order and observed that the NCLT did not have jurisdiction to declare any instrument illegal, adding such powers to declare any instrument as illegal vested with the civil courts. Hence, it asked JAL not to transfer 760 acres of land, mortaged to its lenders, back to its subsidiary firm, JIL. The NCLT had ordered the initiation of insolvency proceedings against JIL in August 2017. In response to the NCLT’s order, JAL said earlier said that it had raised loans against the security of its own assets and the impugned land was mortgaged only as a collateral security as desired by the lenders
Source: Financial Express